Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Flexera Software LLCGlobal Credit Research - 01 Feb 2021New York, February 01, 2021 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Flexera Software LLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on 27 January 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.Key rating considerations are summarized below.Flexera Software LLC's ("Flexera") B2 corporate family rating reflects the company's limited scale, narrow product offering in the software asset management market, and aggressive financial policy as evidenced by the company's debt financed acquisition strategy. The company's strategy limits financial flexibility, and creates integration and operational risks. Flexera benefits from its large portion of recurring revenue, strong margin profile and low capital expenditure, which allow it to generate consistent free cash flow. The company's history of successfully integrating acquisitions and deleveraging following transactions also provides support to the rating. Moody's expects that Flexera will experience near term margin pressure, since the company will need to increase staffing in 2021 to support the recovering end market demand following Flexera's deep operating expense reductions in 2020. Although organic growth should drive operating leverage, increasing EBITDA, Moody's expects that the increase in debt for Thoma Bravo's pending acquisition of a majority ownership stake in Flexera will leave adjusted debt to EBITDA above 7.5x (Moody's adjusted) for the next two years. Still, Moody's expects that Flexera will benefit from continued healthy FCF generation, with FCF to debt (Moody's adjusted) maintained in the mid single digits over the next 12 to 18 months.This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.The principal methodology used for this review was Software Industry published in August 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.This announcement applies only to EU rated, UK rated, EU endorsed and UK endorsed ratings. Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. Terrence Dennehy, CFA VP - Senior Credit Officer Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Stephen Sohn Associate Managing Director Corporate Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 © 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). 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